Labour govt 2020-23

[jonu]

The murky funding arrangement for Cindy's bailout at Ihumatao is starting to emerge. Treasury advised against it, considering it a misuse of the scheme that was used to fund it.

https://www.msn.com/en-nz/news/natio...?ocid=msedgntp

But did that concern our Cindy? Not on yer nelly! Another mess of her own making off her plate, with a showering of our money, that was budgeted for other things. Good one Cindy.

[dobby41]

I don't think the IMF is looking for a quick fix but rather, a change in direction of how NZ's housing market has been treated as a commodity for profiting. You can fact check this but since 1991, home ownership has been on the decline. I can see this with my own eyes of more and more houses that go for sale, end up in the hands of investment consortium groups (that pool individual incomes in like the same manner way as Robert Kyosaki's (author of Rich Dad Poor Dad) has with his seminar promotions over in N. America).

I've read utter non-sense from the anti-CGT camp saying any such tax will have sellers adding that tax amount to the purchase price of the home. WHAT??? That's not gonna happen.

The primary goal for a CGT on houses is to reduce the demand of these rental consortiums by discouraging the use of houses as a means of profiteering. While not 100% effective, this has been done well in places like Canada and in the US, you can read below for the data:

https://businessdesk.co.nz/article/t...w-it-all-began

Yes large cities like Vancouver still experienced high housing prices ; no different to NYC and SanFrancisco. But the real measurement of having a non-housing crisis is simply by the % of families and individuals that OWN their home. What i've seen in Vancouver is detached houses continue to be owned by family dwellings, etc. and for those that choose the rental path, they do so by living in high density apartments (something that Auckland has difficulty in achieving due to the restrictive RMA). Anotherwords, individuals simply can't compete with the private investors when it comes to bidding on a house for sale.

As for houses being the best way to profit in NZ? A CGT will certainly reduce that demand making ventures like house flipping less common (note this would not affect those in the business buying and selling houses) ; what we're speaking of is the useless brightline test of 5 years. These investors simply mortgage on multiple houses for retirement in 10 or 30 years later as the capital gains would be tax free.

Now, will the Labour gov't bring in CGT? Not likely. I don't think any form of new taxes will be on the table.

Lastly, can anyone suggest who actually benefits from the rapidly rise in housing prices? The high income earners that are able to leverage so they can own multiple homes ; maybe the top NZ 5%? Shame on you. The 95% left will suffer as future generations pay more for a house. Those that already own and mortgage free would simply pass it on to the next generation. But since home ownership has been on a decline since 1991, it's clear less and less of that will be the case. Also all the major banks in NZ are foreign owned, they too benefit from the rapid rise in housing prices ; as the profits go to their shareholders overseas.

Yes - the idea that if you have to pay CGT you just add that to the sale price is silly. You are looking for the best price anyway and if you could get 15 or 30% more just by asking you would.

It won't stop traders or flipping because they are caught in the income tax net - any profit is taxed because the house is your product in the same way a dairy sells pies and pays tax on the pie profit.

So housing, with leverage, would still be the best way for capital growth in NZ even with a CGT.

[SBQ]

Yes - the idea that if you have to pay CGT you just add that to the sale price is silly. You are looking for the best price anyway and if you could get 15 or 30% more just by asking you would.

It won't stop traders or flipping because they are caught in the income tax net - any profit is taxed because the house is your product in the same way a dairy sells pies and pays tax on the pie profit.

So housing, with leverage, would still be the best way for capital growth in NZ even with a CGT.

Over 10 years ago (or so) I remember it was popular for people to incorporate a business to be GST registered, then make the purchases for a house under the business name and thus collect the 12.5% GST (ie say on the purchase of the land), then use that GST credit to buy building supplies to build the house. But sooner or later, the house has to be sold and the owner of the company winds up. That meant the sale of the house was price + GST. Of course this 12.5% would not be worn by the bidders of the house at an auction ; highest price is highest price. It mean the seller needs to calculate the 12.5% GST they have to rebate back to IRD. The end result being.... well probably not worth the effort ; but it's clear a tax does not mean you simply add it on to the selling price.

A agree CGT won't stop the leverage / flipping of houses as it 'may' still be the best game in town. This has been the case in Canada too in major cities. However, what is more important is that NZ is on the right path (similar to Canada) where there's more taxes to discourage profiting from selling houses. At a time when the NZ gov't is strapped for tax revenue - it makes sense.

I also do hope if CGT is brought in, they also need to revamp the tax on Kiwi Saver invested in foreign shares. This taxing of paper gains via FIF is a big killer of long term compound gains. I'm all for deferred taxation of gains like they do in the US/Canada as the taxing of capital gains for the elderly / seniors is more tax favourable as pensioners typically have low incomes and thus be taxed at a lower tax bracket.

All levels of gov't in NZ have been slack and done nothing in terms of equitable tax fairness. At the municipal level, it's quite common in Canada for rates based on the individual's position of ownership of houses. For eg. principal resident home gets 1 discount, if the owner is a senior, he can get a further discount on the rates. But if the house is owned in a company or in a trust, they pay the full maximum rate (which is often 40% higher). If the person owns another home, that home will also be assessed at the max rate. All the data is easily checked from the federal tax dept and land registry.

I do applaud what Canada has done to help out low income families in getting into a home through the First-Time Home Buyer Incentive (which is regardless of the LVR that we have in NZ, a 1st time buyer in Canada requires only 5% deposit regardless of the state of the economy of the bank lending requirement etc.). Furthermore the FTHB grant is a loan from the federal gov't of up to 5% of the value of the home. So for those that can't meet the deposit, they can borrow it interest free, though this is only an interest free loan. The criteria is that 5% has to be paid back at time of sale of the house which would be "5% OF THE VALUE of the house" so when prices go up, BOTH the home owner and the gov't benefits as a joint venture.

For other programs Canada has, one can Google about RRSPs (like Kiwi Saver but deferred taxed and up to 18% of individuals income can be contributed, RESP - education fund which grows 100% tax free with no taxes to pay at the end when used for education, RDSP for disabilities, and the best of all, TFSA 'Tax Free Savings Account' which every Cdn over age 18 can have and all investments under the TFSA is 100% tax free - withdrawals are tax free. I don't know why NZ has not considered any of these programs to help those on the lower end?

[dobby41]

I do applaud what Canada has done to help out low income families in getting into a home through the First-Time Home Buyer Incentive (which is regardless of the LVR that we have in NZ, a 1st time buyer in Canada requires only 5% deposit regardless of the state of the economy of the bank lending requirement etc.). Furthermore the FTHB grant is a loan from the federal gov't of up to 5% of the value of the home. So for those that can't meet the deposit, they can borrow it interest free, though this is only an interest free loan. The criteria is that 5% has to be paid back at time of sale of the house which would be "5% OF THE VALUE of the house" so when prices go up, BOTH the home owner and the gov't benefits as a joint venture.

For other programs Canada has, one can Google about RRSPs (like Kiwi Saver but deferred taxed and up to 18% of individuals income can be contributed, RESP - education fund which grows 100% tax free with no taxes to pay at the end when used for education, RDSP for disabilities, and the best of all, TFSA 'Tax Free Savings Account' which every Cdn over age 18 can have and all investments under the TFSA is 100% tax free - withdrawals are tax free. I don't know why NZ has not considered any of these programs to help those on the lower end?

5% deposits don't help if you can't buy a house because everyone is out bidding you.
FTHB doesn't help if you can't buy a house because everyone is out bidding you.
The issue is supply, not tinkering with the rest (at the moment).

[fungus pudding]

5% deposits don't help if you can't buy a house because everyone is out bidding you.
FTHB doesn't help if you can't buy a house because everyone is out bidding you.
The issue is supply, not tinkering with the rest (at the moment).

Precisely.

[fungus pudding]

5% deposits don't help if you can't buy a house because everyone is out bidding you.
FTHB doesn't help if you can't buy a house because everyone is out bidding you.
The issue is supply, not tinkering with the rest (at the moment).

Double posted ???

[SBQ]

5% deposits don't help if you can't buy a house because everyone is out bidding you.
FTHB doesn't help if you can't buy a house because everyone is out bidding you.
The issue is supply, not tinkering with the rest (at the moment).

Perhaps you've not read my post closely. We all know the highest price wins but not everyone buys in prime location; we also know individuals have no chance at having the highest bid against 'consortium investment groups' with full intention of renting every room out. NZ home ownership has been on the decline far too long and COVID didn't help young families, as the NZ gov't continues to do nothing. The transfer of Kiwi Saver funds into a 1st home (a scheme Canada since the 90s) does not help one bit when the banks set LVR too high. We have banks in NZ that recently set LVR to 20 or 40% !! REGARDLESS of the person's situation. In Canada, the gov't has stepped in way back in the 90s through the CHMC (you can Google that) which FORCES banks to gives loans to First Time home buyers by limiting a 5% deposit at anytime of the economic cycle.

With the new FTHB (introduced last year), the 5% basically PAYS for this CHMC 5% deposit!!! The FTHB also applies to those recently divorced too so it's possible the other partner that loses the house can start over in the same manner.

I do think it was amusing how Jacinda placed a foreign buyers ban on houses which did nothing. She would of been better to do what Justin Trudeau did in Vancouver by imposing taxation on all fronts. 20% sales tax on non-residents buying + no rebates in rates + Vacancy tax on ghost houses. How about the supply side? In Canada, fortunately crown land just doesn't go back to the 1st Nations without proof. Yes they need proof to show the land has a significance to their culture and is simply not just 'awarded' back like we do with the Treaty of Waitangi. Also the NZ RMA is way too restrictive. Such a large country like Canada, all the major cities think building UP. For eg. we're seeing a lack of petro stations in downtown Vancouver for the simple reason, VCC reassess the corner lots as prime real estate where 30 or 40 story high rise buildings can be built. It's wasteful. so the trend for EVs in the downtown core has been set at all levels of gov't.

Again, what is NZ doing ? The IMF for years has said on ALL fronts that NZ gov't has pandered to only the rich (who get a tax free ride on higher housing prices) and done nothing at increasing the housing stock and release more land for sale and reducing regulations in the building side.

[jonu]

The murky funding arrangement for Cindy's bailout at Ihumatao is starting to emerge. Treasury advised against it, considering it a misuse of the scheme that was used to fund it.

https://www.msn.com/en-nz/news/natio...?ocid=msedgntp

But did that concern our Cindy? Not on yer nelly! Another mess of her own making off her plate, with a showering of our money, that was budgeted for other things. Good one Cindy.

Oh Dear. Has Minister Woods just misled the House?

https://www.msn.com/en-nz/news/natio...?ocid=msedgntp

This government's arrogance was always going to catch up with it. Not even Team Player Mallard will be able to save her from this one!

[jonu]

The murky funding arrangement for Cindy's bailout at Ihumatao is starting to emerge. Treasury advised against it, considering it a misuse of the scheme that was used to fund it.

https://www.msn.com/en-nz/news/natio...?ocid=msedgntp

But did that concern our Cindy? Not on yer nelly! Another mess of her own making off her plate, with a showering of our money, that was budgeted for other things. Good one Cindy.

Oh Dear. Has Minister Woods just misled the House?

https://www.msn.com/en-nz/news/natio...?ocid=msedgntp

This government's arrogance was always going to catch up with it. Not even Team Player Mallard will be able to save her from this one!

[jonu]

Marama Davidson reverts to Identity Politics....because that what the Left does.

Meanwhile she runs as soon as she's asked what she has actually done. Good one Marama. Good one Cindy. She's your Minister.

https://www.stuff.co.nz/national/pol...ist-accusation